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The Roundtable on Sustainable Palm Oil (RSPO) has launched a new label called RSPO Next, which allows palm oil growers to brand their products as exceeding the association’s minimum standards on environmental and social responsibility.

The industry group, which has since 2010 certified palm oil which is grown in accordance with its rules on sustainable palm oil cultivation, said on Tuesday in a statement that the new label is a voluntary add-on to its existing criteria, and companies can decide on their own timelines for compliance to the standard.

About 20 per cent of the world’s total palm oil supply is certified under the existing certification, known as the RSPO trademark.

Many palm oil giants such as Wilmar, Golden Agri-Resources and Cargill have in recent years gone beyond the basic standards to make zero-deforestation commitments, and to halt development on carbon-rich peatland, among other things.

However, these practices are not currently required to obtain the RSPO stamp and hence, the existing RSPO label does not reflect these additional efforts by companiesto break the link between palm oil and deforestation.

Darrel Webber, chief executive officer, RSPO, said that the RSPO Next label is a way to “provide continuous improvements within the RSPO framework for those ready and able to go further on their sustainability commitments”.

“RSPO Next is an important milestone and can become a new industry benchmark for others who are working hard towards our common goal of 100 per cent certified sustainable palm oil,” he added.

Environmental groups, however, were less optimistic about the new label, with Greenpeace calling it a “failed upgrade” as the optional scheme falls “far short of satisfying mounting demands for a deforestation-free palm oil industry”.

Greenpeace Indonesia forest campaigner Ratri Kusumohartono noted that although RSPO seems to recognise the urgent need for zero-deforestation commitments, “it has created a weak new standard and made it purely optional for RSPO membership”.

But others were more upbeat about the new scheme. Johan Verburg, private sector coordinator, Oxfam Novib - a social non-government organisation which participated in drafting the RSPO Next guidelines - said that the volutnary involvement of progressive growers could eventually lead to broader change in the sector.

In the long term, other companies will see that RSPO Next certification makes sustainable business sense, he said. “Today’s best practices may become tomorrow’s norm.”

What’s next?

RSPO Next requires growers to impose a blanket ban on deforestation, burning, and peatland development. Companies must also track greenhouse gas emissions across their operations and reduce them over time; stop using a toxic pesticide called Paraquat; protect the employment and human rights of workers; and ensure that the palm oil is traceable back to its plantation.

Growers are only eligible for RSPO Next if at least 60 per cent of their plantations are already compliant with the basic RSPO rules, and if they commit to implementing the RSPO Next’s stricter policies across all their plantations.

The association said RSPO Next is not a new physical supply chain. Palm oil buyers that want to claim their commitment to RSPO Next will need to support the scheme through a system of credit purchases.

Each credit will represent one megatonne of certified sustainable palm oil (CSPO) or palm kernel (PK) from an RSPO Next verified management unit - that is, a palm oil grower’s mill, plantation, or subsidiary company.

Only companes which are already purchasing all of their palm oil from RSPO-certified sources can buy the RSPO Next credits, said the industry group.

To make a public claim to RSPO Next, at least 20 per cent of the palm oil used by the company must be bought from RSPO Next-verified growers.

However, it remains to be seen what take-up rates for the new certification will be like. RSPO told Eco-Business that while “there has certainly been a lot of interest from several players in the market, at this stage we can’t yet confirm on numbers”.

But it added that since RSPO Next is a grower-led initiative, it expects considerable participation from palm oil producers and buyers alike. It also declined to comment on the price difference between standard certified sustainable palm oil and the RSPO Next label.

No company has publicly announced whether it will pursue RSPO Next certification. Wilmar, for example, told Eco-Business that it will only make a decision after it reviews the standards and market demand.

But the company pointed out that over 80 per cent of its planted area is already RSPO certified, and there are significant similarities between Wilmar’s ‘No Deforestation, No Peat, and No Exploitation’ policy announced in December 2013 and the RSPO Next requirements.

Palm oil giant Golden Agri-Resources also said that it has not yet decided whether to pursue the RSPO Next certification, but noted that many of the RSPO Next standards such as no deforestation and a ban on Paraquat are already part of its sustainability policy.

“We remain committed to achieving those commitments within our own estate and throughout our supply chain,” said the company in a statement.

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RSPO Next is an important milestone and can become a new industry benchmark for others who are working hard towards our common goal of 100 per cent certified sustainable palm oil.

Glaring loopholes

However, Greenpeace pointed out that even if companies take the initiative and get RSPO Next-certified, the label fails to address several critical sustainability issues plaguing the industry.

Kusumohartono said that one fundamental issue yet to be addressed by RSPO is the definition of “no deforestation”.

Many groups have attempted to define this by measuring the carbon content of vegetation and soil, and recommending a threshold carbon stock level beyond which forest clearing is banned.

Greenpeace has backed a method known as the High Carbon Stock (HCS) Approach, which assesses above-ground vegetation to classify forest into six groups: High density forest, medium density forest, low density forest, young regenerating forest, scrub, and cleared/open land.

The first four categories are considered ‘High Carbon Stock’ forest which should not be cleared.

Kusumohartono noted that instead of going with a proven methodology such as the HCS Approach, RSPO has compromised with a ‘net carbon’ strategy, which allows companies to clear forests as long as they offset this with carbon stored in plantations or elsewhere in their concessions.

“This is not what No Deforestation means to Greenpeace, or to other NGOs and company members of the HCS Approach Steering Group, nor to the traders and consumer companies that have committed to stop buying palm oil linked to deforestation”, she said.

She also criticised RSPO Next for failing to mandate that companies must re-wet and restore the peatland landscapes that they may have drained in the past.

“As Indonesia’s 2015 fire crisis revealed, stopping new peat clearance is not enough to prevent fires from taking hold across the millions of hectares of peatlands already drained for plantations,” she explained, referring to the spate of forest fires between July and November last year which blanketed Southeast Asia in a choking haze.

Rehabilitating peatland is the “only solution”, said Kusumohartono. By failing to demand that companies do so, RSPO is lagging behind Indonesian regulations, which not only ban new peat clearance but demand restoration of burnt areas and efforts to re-wet damaged peatlands, she added.

Nevertheless, she acknowledged that one positive aspect of RSPO Next is that it requires member companies to enforce its guidelines at an organisation-wide level. “This encourages greater responsibility across the supply chain,” she said.